Taiwan shares end above 17,000 point mark

Shares in Taiwan moved higher to close above the 17,000 point mark on Monday as investors took cues from the record highs enjoyed by the major indexes on the United States markets at the end of last week.

The bellwether electronics sector dominated, leading the broader market to climb out of the losses seen in the past couple of sessions, while non-tech stocks were largely muted despite the gains posted by the transportation sector, according to dealers.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 80.83 points, or 0.48 percent, at 17,068.24, after moving between 17,021.77 and 17,119.43. Turnover totaled NT$325.42 billion (US$11.68 billion).

The market opened up 0.20 percent to breach 17,000 points in the wake of a rally on the U.S. markets, where the Dow Jones Industrial Average, the S&P 500 index and tech-heavy Nasdaq index hit record highs on Friday.

Momentum on the local main board continued with the tech sector in focus but its gains were capped ahead of the 120-day moving average of around 17,100 points by the end of the session.

"Despite the gains posted by the electronics sector and the Taiex, many large cap tech stocks -- in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) -- remained in consolidation so it was no surprise that the upturn stopped before 17,100 points today," MasterLink Securities analyst Tom Tang said.

"Today, buying rotated to second- or even third-tier stocks in the tech industry," Tang said. "It was because many foreign institutional investors stayed on the sidelines leaving tech heavyweights behind."

TSMC, the most heavily weighted stock in the local market, closed unchanged at NT$590.00, while the electronics sector rose 0.64 percent as the semiconductor sub-index ended up 0.30 percent.

According to the TWSE, foreign institutional investors sold a net NT$3.20 billion worth of shares on the main board Monday.

Among other tech heavyweights, United Microelectronics Corp. lost 0.69 percent to end at NT$57.60, and iPhone assembler Hon Hai Precision Industry Co. fell 0.47 percent to end at NT$106.50.

However, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.93 percent to close at NT$2,110.00 as bargain hunters took advantage of the stock's recent losses.

It was a different scenario for smaller electronics stocks. Metal-oxide-semiconductor field-effect transistor (MOSFET) maker Panjit International Inc. and artificial intelligence memory solution provider AP Memory Technology Corp. soared 10 percent, the maximum daily increase, to end at NT$123.50 and NT$591.00, respectively.

"Local investors also rushed to buy into tech stocks on the over-the-counter (OTC) market today, which outperformed the Taiex," Tang said.

The OTC index closed up 1.44 percent to 217.22. Among the tech stocks on the OTC market, MOSFET supplier Taiwan Semiconductor Co. surged 10 percent to end at 89.30.

Returning to the main board, the performance of old economy stocks appeared mixed as buying featured smaller tech stocks, Tang said.

In the old economy sector, Nan Ya Plastics Corp. lost 0.24 percent to close at NT$84.90, textile brand Far Eastern New Century Corp. fell 0.34 percent to end at NT$29.00, and Formosa Plastics Corp. dropped 0.47 percent to close at NT$107.00.

Wei Chuan Foods Corp. rose 0.22 percent to end at NT$22.90, and rival Uni-President Enterprises Corp. gained 0.45 percent to close at NT$66.90.

Rotational buying boosted the transportation sector by 0.95 percent, with Evergreen Marine Corp. up 1.01 percent to end at NT$100.50 and rival Yang Ming Marine Transport Corp. up 1.55 percent to close at NT$98.00.

"The buying in shipping stocks largely reflected hopes that shipping companies will soon report strong earnings for the third quarter on higher freight rates," Tang said.

In the financial sector, which fell 0.31 percent, Cathay Financial Holding Co. lost 0.86 percent to close at NT$57.60, and Fubon Financial Holding Co. fell 0.68 percent to end at NT$73.10.

"Investors should pay close attention to the upcoming policymaking meeting by the U.S. Federal Reserve, the conclusion of which could move the global markets," Tang said.

The two-day Fed meeting will start Tuesday. The market is expecting that the Fed will announce a downsizing of its asset purchases after the meeting, while the central bank could start a rate hike cycle in July next year.

Source: Focus Taiwan News Channel